The first named Plaintiff, Tyche Asset Management Pty Ltd ("Tyche"), employed the second named Defendant, Mr Li Fan. Part of his role was to obtain commissions in connection with the referral of potential purchases to various property developers or their agents.
Auzenith Holdings Pty Ltd ("Auzenith"), the Second Plaintiff, is related in some fashion with Tyche, and they commenced proceedings on 16 September 2021 against Mr Fan and a company owned or controlled by him, Flyland Development Group Pty Ltd ("Flyland"), the First Defendant, alleging that Mr Fan had improperly arranged for commissions payable to Tyche and, in one case, to Auzenith to be paid to Flyland.
Freezing orders were obtained together with, on 24 September 2021, ancillary orders which required Mr Fan to provide details of what became of the various monies paid by a third party, details of the referrals by Mr Fan to the third party and to provide copies of his bank statements for particular specified accounts: see Tyche Asset Management Pty Ltd v Flyland Development Group Pty Ltd [2021] NSWSC 1283 at [82] per Henry J.
Mr Fan has made two affidavits both dated 12 October 2021 in compliance with the orders of the Court. In relation to the first, however, Mr Fan objects pursuant to s 128A of the Evidence Act 1995 (NSW) ("Evidence Act") to produce that affidavit. In relation to the second affidavit, no objection is taken by him.
The first affidavit was provided to the Court in an envelope marked "Privilege Affidavit - Li Fan" in accordance with the requirements of s 128A(2). An affidavit of Mr Fan's solicitor, Mr David James Fleming, of 12 October 2021 has been filed and served in which Mr Fleming sets out the basis of the objection, which is that, in short order, the information disclosed in the privilege affidavit may tend to prove that Mr Fan has committed offences against Australian law, namely, the Property and Stock Agents Act 2002 (NSW), the Crimes Act 1900 (NSW) and s 184 of the Corporations Act 2001 (Cth).
I have received helpful written submissions from Mr Burton, Counsel for the Defendants, and helpful oral submissions both from Mr Burton and also from Mr Maghami, Counsel for the Plaintiffs. There are three matters that require consideration in an application such as this. Those are the matters set out in 128A(6) of the Evidence Act which is in the following terms:
"(6) If the court is satisfied that -
(a) any information disclosed in the privilege affidavit may tend to prove that the relevant person has committed an offence against or arising under, or is liable to a civil penalty under, an Australian law, and
(b) the information does not tend to prove that the relevant person has committed an offence against or arising under, or is liable to a civil penalty under, a law of a foreign country, and
(c) the interests of justice require the information to be disclosed,
the court may make an order requiring the whole or any part of the privilege affidavit containing information of the kind referred to in paragraph (a) to be filed and served on the parties."
In relation to the first requirement, that there is information disclosed in the privilege affidavit which "may tend to prove that the relevant persons committed an offence against Australian law", there is no dispute between the parties that the privilege affidavit may tend to prove that Mr Fan has committed an offence.
Consideration was recently given by the High Court to section 128A of the Evidence Act 1995 (Cth), which is, for present purposes, in the same terms as its NSW analogue with which the Court is presently concerned, although there, the Court was concerned with an issue not relevant to the present case: see Deputy Commissioner of Taxation v Shi [2021] HCA 22. Nevertheless, Gordon J (with whose analysis Kiefel CJ, Gageler and Gleeson JJ concurred) explained that (at [34]):
"In assessing whether there are reasonable grounds for the objection, the court must assess whether there is a 'real and appreciable risk' of prosecution if the relevant information is disclosed. The gist of the privilege is that disclosure of the information 'would tend to expose the claimant to the apprehended consequence'. The 'reasonable grounds' inquiry required the court to assess, having regard to the circumstances of the case and the nature of the information which the relevant person is required to disclose, whether there are reasonable grounds to apprehend danger to them from being compelled to disclose the information. This requires consideration of whether information may tend to prove the commission of an offence, as well as the likelihood, or risk, of steps being taken to prosecute that offence. There must be some material upon which the court can be satisfied of these matters. The court is not limited to information in the privilege affidavit or any other material filed by the relevant person."
The Plaintiffs, as I have noted, do not challenge the assertion that s 128A(6)(a) is met. Mr Fan does not assert that any foreign law is involved, and he has, through his solicitor's affidavit, accepted that production of the information in the privilege affidavit is required in the interests of justice.
I should just briefly summarise the matters taken from the affidavit of Mr Fleming which, taken together with the nature of the proceedings themselves, give support to the proposition that there is a real and appreciable risk of prosecution of Mr Fan, and those are these matters:
1. the allegation in the affidavit of Ms Ren of 16 September 2021 set out in paragraph 16 of Mr Fleming's affidavit which are to the effect that Mr Fan acted deliberately and dishonestly and/or fraudulently in relation to the impugned commissions;
2. what Counsel for the Plaintiffs told the Court on 14 September 2021 during the ex parte application (see T8-9 of the transcript annexed the affidavit of Mr Fleming); and
3. Ms Ren, in her affidavit, deposed to her belief that Mr Fan had committed fraud and stated that she had decided not to report the matter to police at the time in the hope that she "could recover the money he [Mr Fan] had stolen from the first plaintiff."
The only question that remained in my mind was whether or not there was a necessity for me to read the Privilege Affidavit. Mr Burton accepts that it would be open to the Court to do so and I think it must be open to the Court to do so when there is some doubt as to the claim for privilege against self-incrimination. However, in a case where the Court is satisfied on the basis of material provided that there is an appreciable risk of self-incrimination, I do not think it is necessary to read the Privileged Affidavit, and neither Counsel requested or suggested that I needed to do so.
I draw support for that conclusion from the decision of Brereton J (as his Honour then was) in Vaughan Constructions Pty Ltd v Alan Luong [2008] NSWSC 1033. I should at the outset indicate that that was a matter involving s 87 of the Civil Procedure Act 2005 (NSW), which is quite similar to 128A but does not apply where 128A of the Evidence Act applies. However, in that case, his Honour referred to the appreciable risk test, cited Sorby v Commonwealth (1983) 152 CLR 281 at 289, and having noted that there had been a solicitor's affidavit making it clear that the defendants were prepared to provide the evidence required by the orders if the Court granted a certificate under s 87(4), his Honour then indicated that he would grant to the first and second defendants a certificate under s 87 "in respect of the evidence to be produced by them under the orders made on 13 August 2008": at [8]. Clearly, his Honour did not think it necessary to examine the evidence that was to be produced and was prepared to give a certificate in advance.
I might add also that this is similar to what occurs during a hearing when the issue of whether or not evidence yet to be given by a witness should be the subject of a s 128 certificate arises, since, at that point, the evidence has not yet been led and then the Court usually, in those circumstances, will indicate if it is prepared to grant a certificate and will then order the witness to answer the questions if it is persuaded that it is in the interests of justice that he or she do so, even if the answers yet to be given may incriminate or might tend to incriminate the witness.
I conclude therefore that, whilst open to the Court and sometimes appropriate to do so, it is not necessary that the Court actually examine the privilege affidavit.
I therefore propose to make orders in accordance with the short minutes of order.
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Decision last updated: 01 November 2021